A French portal Mediapart has alleged that its investigation has revealed that Dassault Aviation paid kickbacks amounting to at least €7.5 million to an intermediary, Sushen Gupta, in Mauritius between 2007 and 2012. The secret commissions were paid to clinch the Rs 59,000-crore ($9.3-billion) inter-governmental deal with India for then 36 (now 126) Rafale fighter jets.
Indian media points out that the then ruling Indian National Congress coalition government had negotiated a price of Rs. 526 crore but the present Bharatiya Janata Party coalition approved the deal at exorbitant price of Rs 1670 crore. Thus Rs 144 per crore as commission, or kickbacks, went into the middleman’s pocket.
Mediapart revealed, `the deal involves offshore companies, dubious contracts and false invoices; that detectives from India’s federal police force, the Central Bureau of Investigations (CBI), and from the Enforcement Directorate (ED), which fights money laundering, have had proof since October 2018 that Dassault paid at least €7.5 million euros (equivalent to just under Rs 650 million) in secret commissions to Gupta’.
An independent French judge has been appointed to investigate the charges. But, even Mediapart itself is pessimistic about an early judgment, as it is a complex case. the judge will have to seek the least-likely cooperation of the Indian government. In 2019, India’s Supreme Court and the Comptroller and Auditor General (CAG) had already declared the deal “transparent”.
The BJP shrugged off the opposition’s allegation saying that the period during which the commissions were paid related to the period Indian National Congress, INC (which they derisively called “I need commission”) ruled India.
The mechanisms of public accountability in India have collapsed. Corruption has become a serious socio-political malady as politicians, bureaucracy and armed forces act in tandem to receive kickbacks. Because of lethargic investigation, the anti-corruption cases, filed in courts, drag on for years without any results
Mediapart itself is not optimistic about early heasrings.
On 11 October 2018, Mauritius’ attorney general provided India’s CBI documents about payment of commission connected. Within less than two weeks,on October 23, the CBI’s headquarters were raided by the Delhi Police and the CBI’s Director Alok Verma was removed in what the opposition called a nocturnal conspiracy to bury the murky Rafale ghost.
The deal engenders several questions. The delay in finalization of the procurement deal is obvious. What about India’s claims about indigenization of defence equipment? What about Teja aircraft?
Why has neither the Dassault nor the CBI responded to Mediapart’s allegations?
How was a deal between Dassault and the Anil Ambani group signed even before any official announcement?
All defence contracts have a mandatory anti-corruption clause “no bribery, no gift, no influence, no commission, no middlemen”. And this clause is included in the tender for purchase of fighter aircraft. Why did the Indian prime minister Modi abrogate this clause?
How didGupta get hold of confidential documents belonging to the Indian Negotiating Team (INT) in 2015 from the Ministry of Defence? The documents detailed the stance of Indian negotiators during the final lap of negotiation and, in particular, how they calculated the price of the aircraft. This gave a clear advantage to Dassault Aviation (Rafale). The documents included the ‘benchmark price document’ of 10 August 2015, the ‘record of discussions’ by the INT of the Defence Ministry, the ‘excel sheet of calculations made by defence ministry’ and ‘Eurofighter’s counter offer of 20 percent discount to the government of India’. A note from 24 June 2014, sent to Dassault by Gupta, offering a meeting with “the political high command” was also recovered and asked if such a meeting had taken place with the “high command” in the Modi government.
Why did Modi not initiate an investigation into the role of the middleman despite recovering incriminating documents from him?
It appears all governments in India pay lip service to defence reforms. Criminals are perched in Indian parliament. According to the Association of Democratic Reforms, the ruling BJP has 116 MPs or 39 percent of its winning candidates with criminal cases, followed by 29 MPs (57 percent) from the Congress. Nearly half of the newly-elected Lok Sabha members have criminal charges against them, a 26 per cent increase as compared to 2014. A pauper in India can hardly aspire to become a law maker.
India’s Tehelka Commission of Inquiry headed by had suggested in 2004 that a sitting Supreme Court Judge should examine all defence files since Independence. Concerned about rampant corruption in defence purchases, he desired that the proposed Supreme Court Judge should be assisted by the Central Vigilance Commission and the CBI.
He stressed that unless the existing system of defence procurement was made more transparent through corrective measures, defence deals would continue to be murky. He submitted his report to thenPM Atal Behari Vajpayee. The Commission examined 15 defence deals including the AJT, Sukhoi, Barak missiles, T-90 tanks, tank navigation systems, simulators, hand-held thermal imagers, Karl Gustav rocket and Kandla-Panipat pipeline. The irregularities in the scrutinised defence deals compelled the Commission to suggest de novo scrutiny of all defence purchases since Independence.
Rampant corruption, particularly in defence purchases, is a source of deep concern, to the Indian electorate. The courts absolved then PM Rajiv Gandhi of involvement in the BOFORS scam (as the present Supreme Court absolved Modi). The BJP, then in opposition, exploited Rajiv’s acquittal as an election issue. Kuldip Nayyar, in his article “The gun that misfired” (Dawn, 14 February 2004), lamented, “There was practically no discussion on Bofors-guns kickbacks in the 13th Lok Sabha which has been dissolved for early elections. Once the main target Rajiv Gandhi died, the non-Congress parties lost interest in the scam”.
The mechanisms of public accountability in India have collapsed. Corruption has become a serious socio-political malady as politicians, bureaucracy and armed forces act in tandem to receive kickbacks. Because of lethargic investigation, the anti-corruption cases, filed in courts, drag on for years without any results. To quote a few past cases: (a) Bofors-gun case (Rs 64 crore) case was filed on January 22, 1990 and charge-sheet served on October 22, 1999. Among the accused were Rajiv Gandhi, S K Bhatnagar, W N Chaddha (middleman), Octavio, and Ardbo. The key players in the scam died before the court’s decision). (b) No recoveries could be made in the HDW submarine case (Rs 32.5 crore). The CBI later recommended closure of this case.
Like Modi, the previous prime ministers kept the recommended reforms on the backburner. For instance, then Central Vigilance Commissioner P Shankar alleged (October 2003): “The CVC had submitted its defence deals report on March 31, 2001. Yet a year later, the government has not conducted the mandatory departmental inquiry to fix responsibility”. Shankar explained that the CVC had examined 75 cases apart from specific allegations made by former MP Jayant Malhoutra and Rear Admiral Suhas V Purohit Vittal. Malhoutra’s allegations were about middlemen in defence deals.
After his report, the Ministry lifted the ban on agents in November 2001 to regularise the middlemen. Purohit, in his petition in the Delhi HC on a promotion case, had alleged unnecessary spare parts were bought from a cartel of suppliers instead of manufacturers, at outrageous prices and at times worth more than the original equipment.
The problem is that the modus operandi of corruption ensures that it is invisible and unaccounted for. There are widespread complaints that the politicians exercise underhand influence on bureaucracy to mint money. With middlemen’s raj, the situation is unchanged even today.
